There are actually two settings for proxy settings in Patch Manager .. one for tasks initiated from the Patch Manager server (such as catalog synchronizations), and one for tasks initiated from the console -- such as content downloads. These are separate settings to faciliate the scenario where the console and server may actually have different proxy targets.
To configure the Console Proxy Settings, select the Administration and Reporting node, select the General Settings page, and double-click on Proxy Configuration to open the Console Proxy Settings dialog.
You can find both proxy configuration procedures in the section Configuring Proxy Settings on page 24 of the Patch Manager Administrator Guide.
Thanks very much LGarvin. This has fixed the issue for me.